1. Technical Field
The present disclosure relates to mechanisms, methods, procedures and operational functions for reducing and/or inhibiting employee theft, undercharging, or overcharging for items at a Point of Sale (POS) and shrinkage in the business.
2. Description of the Related Art
Point of sale (POS) systems are used to process transactions in most businesses, including grocery stores and retail establishments. A POS system typically includes a POS terminal, which may be a cash register or the like. The POS terminal is typically operated by a cashier but may also be self-operated, such as a POS terminal at a self-checkout line in a grocery store or retail business. When a customer is ready to purchase merchandise, the customer presents the item at the POS terminal. The item may have a barcode or other identification device that enables the POS terminal to find the price of the item in an inventory system. Once the item is sold, the POS terminal updates the inventory system with information about the sale.
Businesses that use POS systems often have problems preventing theft by employees, which is referred to as “internal theft” that causes “shrinkage” in the business. Many businesses have a flawed operational function or system at their POS terminals. This weakness in the business operational system allows the cashier and people in authority over the cashier to manipulate the POS terminal to their advantage and steal from the business by bypassing inventory systems that rely on tracking of inventory identifiers at the POS, thereby causing shrinkage in the business. This internal theft or shrinkage is often performed without any notice or trace as to what actually happened. Internal theft puts the business owner, company, and/or corporation in a very disadvantaged position, where they fail to reap or earn the profit in their business or even go out of business. Undercharging or overcharging for items based on erroneous pricing data resulting from missing inventory identifiers also results in shrinkage of the business. Internal theft, undercharging, or overcharging is difficult to track and can be even more difficult to prevent.
To further illustrate these and other problems, FIGS. 1 through 3 illustrate example prior art POS terminals 100. In particular, FIGS. 1 through 3 illustrate payment keys 110 on a POS terminal 100 that enable an employee to enter into a transaction without identifying an item or by inadequately identifying the item. This lack of identification facilitates internal theft.
Situations and conditions giving rise to internal theft include where employees, such as cashiers fail to identify merchandise on the receipt at the POS terminal 100. This is actually a faulty POS system, procedure, business method and/or business operational function that allows such incidents to happen in the business. By not identifying the merchandise or products at the POS, the employee has an opportunity to pad the amount of the sale on general terms like department sale, taxable item or non-taxable item or same sort of sale that fails to identify the product and or merchandise sale that cannot be verified, matched and/or compared with the inventory or the data bank representing the particular sale of the item in the business. Such faulty POS systems would enable a cashier or dishonest employee of any authority in the business system to manipulate the POS system to their advantage and pocket the difference. Through the complexities of inventory systems, some items are not inventoried, and for such items, some businesses offer keys 110 to enable the POS terminal to process a sale of such items. The illustrated payment keys 110 include a taxable payment key 110a, a non-taxable payment key 110b, a pharmacy taxable payment key 110c, a pharmacy nontaxable payment key 110d, various specific department keys 110e, and a general department key 110f. 
In some businesses, any product and or merchandise can be sold using the keys 110 without knowing what item has been sold and for what price even if the item was a scannable product or merchandise there may be no way to stop anyone, whether cashier or manager, from selling that item for a different price. If any item is not fed into the scanning system or the POS perpetual inventory control system or data bank system by “mistake” then such merchandise can easily be sold at any price by anyone at anytime. In effect, the keys 110 provide employees an opportunity of manipulating the price at their own will. This problem arises particularly in businesses who categorize their inventory into departments such as “Deli,” “Floral,” “Wine,” “Meat,” and “Produce,” where the items sold in these departments are of different varieties, kind and cost. These items are often not individually identified and thus may be purchased through the use of a generic key 110. Because the items are not identified in the sale, they are also not identified on a customer receipt or are identified only generically, which leaves the option open for a sale of the item that cannot be matched or audited with products and/or merchandise in the inventory. As such, the products and or merchandise disappear from the inventory system without causing any alert to the sales system, the security personnel or the camera.
As an example, management may suggest the price of a certain item to be $6.00, but the item is not identified in the inventory system and a price gun is used by an unscrupulous employee to mark the price of the item to be $8.00. This way, the item will be sold at the price marked, and the difference in the amount charged will enable the manager to later adjust the inventory of the item when the next shipment comes by simply “receiving it on paper” or by “returning” the shipment later as a mistaken delivery. Thus, there are enough funds to show that the item was actually received and also sold in the store, but in actuality adjustments can be made to show the entire process has taken place after the inventory has arrived which actually has never entered the store. As illustrated graphically by FIG. 4, dishonest managers 406 and directors 408 may contribute to internal theft and shrinkage in the business more than cashiers 404 and customers 402, and they may commit such fraud through internal theft systems similar to the system set forth above. The internal theft systems enable dishonest employees to complete the paper requirements, but actually cause the shrinkage in the business without knowledge of security personnel and out of sight of the security cameras. Since the system allows the sale of a generic taxable item, there is no way to prove that the shipment or inventory was ever received. If such items were sold under a generic key 110 (e.g., TAXABLE ITEM OR NON TAXABLE ITEM or of the same sort key) and not as a particular item which actually came as per inventory, there is no way to detect what came in the store and what was sold. In another words the merchandise sold at the POS terminal failed to match the item with the inventory data base and also failed to take out or reduce the item from the inventory (no perpetual inventory will occur in such conditions) leaving the misinformation that item is still there (later causing shrinkage in the business after an audit is done). Whereas such sale generates the cash that has happened due to unidentified sale actually gives the dishonest employee the ability to adjust or use the money to adjust any sale or pocket the difference without any knowledge as it would not alert anyone including security personnel and or camera as they will have no knowledge as to what actually has happened.
These inventory problems also create accounting and auditing problems where inventory received and sold cannot be reconciled or balanced. When items with barcodes or other identifying information are purchased, they are purchased on the definite product identity, size, weight and price basis, but when the same items are sold using a POS terminal 100 incorporating the keys 110, the items lose their identity in the accounting, auditing and inventory system. In addition, local, state, and federal governments lose tax revenue when internal theft occurs.
There have been few incentives to change the problem that occurs due to unidentified product sales which is by means of improving the business method, procedure and or operational functions. Businesses can effectively ignore the problems identified above when they are selling almost 90 to 95% of their products by means of scanning. However, significant profits may also be regained on the 5 to 10% of the remaining products.
With the help of an improved system, method, procedure and operational function provided by the present invention, internal theft, undercharging, and overcharging can be inhibited and shrinkage in business can be reduced remarkably.